The Members of . Deccan Polypacks Limited .
Report on the Financial Statements
We have audited the accompanying financial statements of Deccan Polypacks Limited("the Company") which comprise the Balance Sheet as at March 31 2016theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "thefinancial statements")
Management's Responsibility for the Financial Statements
The Companies Board of Directors is responsible for the matters stated in Section134(5) of the Companie's Act 2013 ( "the Act") with respect to the preparationof these financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including Accounting Standards prescribed undersection 133 of the Act as applicable. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting the frauds and otjierirregularities selection and application of appropriate accounting policies; makingjudgements and estimates.that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of me accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.Wehave taken into account the provisions of the Act the accounting and auditingstandards and the matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder and the Order under Section 143(11) ofthe Act.
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under
Section 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and.plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor'sjudgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error . In making those risk assessmentsthe auditor considers internal financial control relevant to the Company's preparation ofthe financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An Audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for qualified audit opinion on the financial statements. .
Basis for Qualified Opinion
Attention is invited to Note No : 14 and 30 of the Financial Statements regarding tradereceivables amounting to Rs. 9870205 outstanding for a period exceeding 3 years as onthe balance sheet date. In the absence of confirmation of balance and other communicationbetween the Company and its customer we are unable to comment on the extent of ultimaterecoverability of the dues and its impact on the loss for the year on the tradereceivables and on the reserves as at March 312016. .
In our opinion except for the effect on the financial statements of the matterdescribed in the basis for qualified opinion paragraph and to the .best of ourinformation and according to the explanations given to us the aforesaid financialstatements give the information required by the Act in the manner so required and givea.true and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at March 312016 and its loss and itscash flows for the year ended on that date.
Emphasis of Matter -
We draw attention to .
a) Note 26 to the Financial Statements regarding suspension of manufacturing operationsof the Company and preparation and presentation of financial statements on a going concernbasis for the reasons stated in ; b) Note 28 to the Financial Statements regardingimpairment of assets for the reasons stated there in ; c) Note 30 to the FinancialStatements regarding accounting for inventory at carrying value for the reasons stated -there in; d) Note 31 regarding not obtaining confirmation of balances fromcompany's.vendors and customers.
Our opinion is not modified in respect of these matters
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11)of section 143 ofthe Act we give in the Annexure A' a statement on the matters specified in paragraphs 3and 4 of the Order "
2 As required by Section 143(3) of the Actwe report that:
a) we have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;
b) in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c) the balance sheet the Statement of Profit and Loss and the cash flow statementdealt by this Report are in agreement with the books of account;
d) in our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts ) Rules 2014;
e) On the basis of written representations received from the directors as on 31stMarchj2016 and taken on record by 'the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a director in terms of Section164 (2) of the Act.
f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in 'Annexure B' and
g) With respect to the other matters to be included in the auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditor's) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us.
i) the company has disclosed the impact of all pending litigations on its financialposition in its financial statements - Refer Note 25 to thefinancial statements;
ii) no provisioning is required under any law Oraccounting standards for materialforeseeable losses on long term contracts. Further according to the information andexplanations given to us and in our opinion there were no derivative contracts enteredinto by the Company as at March 312016.
iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund.
Annexure A to the Independent Auditors" Report
(Referred to in paragraph 1under "Report on Other Legal and RegulatoryRequirements' section of our report of even date to the members of Deccan PolypacksLimited)
(i) In respect of its Fixed Assets :
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) According to the information and explanations given to us the fixed assets havebeen physically verified during the year by the Management in accordance with a programmeof verification which in our opinion provides for physical verification of all fixedassets at'reasonable intervals having regard to the size of the Company and the nature oftheir assets. The discrepancies noticed on such verification were not material and havebeen properly dealt \vithin the books of account.
(c) Title deeds of all the immovable properties are held in the name of the company
(ii) In respect of Inventories
a) The inventories have been physically verified during the year by the management atreasonable intervals.In our opinion the frequency of verification is reasonable.
b) In our opinion and according to the information andexplanations given to us and onthe basis of our examination of the inventory records the company is maintaining properrecords. The discrepancies noticed on physical verification of inventory as Compared tobook records were not material in relation to the operations of the company and the samehave been properly dealt within the books of account
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to Companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theCompanies Act2013 and accordingly paragraph 3(iii) of the Order is not applicable atpresent.
(iv) According to the information and explanations given to us the company has neithergiven any loans nor made any investments. Accordingly paragraph"3(iv) of the Order isnot applicable at present
(v) According to the information and explanations given to us the Company has notaccepted deposits from the Public. Accordingly paragraph3(v) of the Order is notapplicable to the Company.
(vi) On the basis of records produced to us we are of the opinion that prima facie thecost records and accounts prescribed by the Central Government under Section 148 (1) ofthe Companies Act 2013 have been maintained.
However we are not required to and have not carried out any detailed'examination ofsuch accounts and records.
(vii) According to the information and explanations given to us and according to thebooks and records as produced and examined by us in accordance with the generally acceptedauditing practices in India in respect of statutory dues;
a) The Company is generally regular in depositing all undisputed statutory dues exceptprovidentfund Income tax Professional Tax with the appropriate authorities during theyear.
b) There were no undisputed amounts payable in respect of provident fund incometaxsales taxservice tax customs duty value added tax and cess which were in arrears asat March 312016 for a period of more than six months from the date they became payableexcept the following :
|Statute ||Nature of Dues ||Forum where dispute is pending ||Amount Involved (In Rs.) |
|Sales Tax ||Restriction of set off tax on prorate basis ||Appellate Tribunal A.P. ||360000/- |
viii) According to the information and explanations given to us and in our opinion asat March 312016 there has defaults in repayment of dues to banks details given asfollows ;:
|Name of Bank ||Amount Defaulted ||Period of Default |
|Sate Bank of India ||500000 ||31 days |
The Company has not issued any debentures
ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3(ix) of the Order is not applicable. (x) During the course of our examinationof the books and records of the Company carried out in accordance with the generallyaccepted auditing practices in India and according to the information and explanationsgiven to us no material fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year nor have we been informed of suchcase by the management.
xi) According to the information and explanations give to us and based on ourexamination of the records of the Company managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act.
xii) According to the information and explanations given to us and based on ourexamination of the records the.Company is not a nidhi company. Accordinglyparagraph 3(xii) of the Order is not applicable.
xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by theapplicable*accounting standards.
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully orpartly convertible debentures duringthe year. J
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him during the year.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934
Annexure B to the Independent Auditors'report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We were engaged to audit the internal financial controls over financial reporting ofDecc.an Polypacks Limited ("the Company") as of March 312016 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible'for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountantsof India ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required underthe Companies Act 2013
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit conducted in accordance with theGuidance Note on Audit of Internal Financial Controls over Financial Resorting (the"Guidance Note") and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 Because of the matterdescribed in Disclaimer of Opinion paragraph below we were not able to obtain sufficientappropriate audit evidence to provide a basis for an audit opinion on internal financialcontrols system over financial reporting of the Company. .
Meaning of Internal Financial Controls overFinancial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability- of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. Acompany's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Disclaimer of Opinion
According to the information and explanations given to us the company has notdocumented its system of internal financial control over financial reporting on thecriteria based on the essential components of internal control stated in the Guidance Noteon Audit of Internal Financial Controls over Financial Reporting issued by the ICAI.Therefore we are unable to obtain sufficient appropriate audit evidence to express anopinion on the adequacy and operating effectiveness of internal financial controls overfinancial reporting.
We have considered the disclaimer stated above in determining the nature timing andextent of audit tests applied in our audit of the financial statements of the Company andtht disclaimer does not affect or opinion on the financial statements of theCompany. .
| ||for M Bhaskara Rao & Co. |
| ||Chartered Accountants |
| ||Registration No: 000459S |
| ||VKMuralidhar |
| ||Partner |
|Hyderabad May 302016 ||Membership No: 201570 |